Exam 23: Evaluating Variances From Standard Costs

Match each of the following phrases with the term (a-e) it describes. -Currently attainable standard

The following information is for the standard and actual costs for Happy Corporation: Determine (a) the direct materials quantity variance, price variance, and total cost variance; (b) the direct labor time variance, rate variance, and total cost variance; and (c) the factory overhead volume variance, controllable variance, and total factory overhead cost variance.(Note: Do not round interim calculations.)

A favorable cost variance occurs when the actual cost is less than the standard cost.

Sally's Chocolate Company makes gourmet cupcakes which are sold by the dozen. Compute the standard cost for one dozen cupcakes, based on the following standards:

Using the following information, prepare a factory overhead cost budget for Jacob Company where the total factory overhead cost is $206,500 at normal capacity (100%). Include capacity at 60%, 80%, 100%, and 120%. Total variable cost is $15.25 per unit and total fixed costs are $54,000. The information is for the month ending October 31. (Hint: Determine units produced at normal capacity.)

​ *Actual hours are equal to standard hours for units produced.​ -Which of the following is the correct formula for the revenue volume variance?

If the standard to produce a given amount of product is 2,000 units of direct materials at $12 and the actual direct materials used are 1,600 units at $13, the direct materials quantity variance is $5,200 favorable.

Compute the standard cost for one hat, based on the following standards for each hat:

Ruby Company produces a chair for which the standard specifies 5 yards of material per unit. The standard price of one yard of material is $7.60. During the month, 8,500 chairs were manufactured, using 40,000 yards at a cost of $7.50.​ Determine the (a) direct materials price variance, (b) direct materials quantity variance, and (c) total direct materials cost variance.

St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% of normal production capacity. Production was budgeted to be 12,000 units. The standard hours for production were 5 hours per unit. The variable overhead rate was $3 per hour. Actual fixed overhead was $360,000, and actual variable overhead was $170,000. Actual production was 11,700 units.​ -The variable factory overhead controllable variance is

Oak Company produces a chair for which the standard is 6 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 48,875 yards.Journalize the entry to record the direct materials used in production.

Prepare an income statement that includes variances for the year ending December 31 through gross profit for Baxter Company using the following information. Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.)

Robin Company records standard costs and variances in its accounts. Robin purchased and used 520 pounds of direct materials to produce a product with a 510 pound standard direct materials requirement. The standard price is $2.10 per pound. The actual materials price was $2.00 per pound.​ Journalize the entries to record (a) the purchase of the materials and (b) the materials used in production.

While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations.

The following information relates to manufacturing overhead for Chapman Company: Standards: Total fixed factory overhead $450,000 Estimated production 25,000 units (100% of normal capacity)Overhead rates are based on machine hours.Standard hours allowed per unit produced 2 Fixed overhead rate $9.00 per machine hour Variable overhead rate $3.50 per hour Actual: Fixed factory overhead $450,000 Production 24,000 units Variable overhead $170,000 Compute (a) the fixed factory overhead volume variance, (b) the variable factory overhead controllable variance, and (c) the total factory overhead cost variance.

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours)3 hours per unit at $0.80 per hour Variable overhead 3 hours per unit at $2.00 per hour Actual Costs Total variable cost, $18,000 Total fixed cost, $8,000 -The variable factory overhead controllable variance is

Match each of the following phrases with the term (a-e) it describes. -Actual cost < standard cost at actual volumes

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 -The direct materials price variance is

​ *Actual hours are equal to standard hours for units produced.​ -SeaSpray Resort pays housekeeping staff $15 per hour (standard) and expects its 1,000 rooms to be cleaned in 750 hours (standard). If staff logged 800 hours to clean the rooms, the direct labor time variance is

The following data relate to direct labor costs for the current period: Standard costs 6,000 hours at $12.00 Actual costs 7,500 hours at $11.40 The direct labor rate variance is